UPDATE 2-S Africa's Tongaat FY earnings up on sugar

* FY diluted headline EPS at 795.5 cts

* Focus on raising sugar output to 1.9 mln t/yr * CEO sees higher world sugar price

* Says financial year-end has changed to 31 March

* Shares fall 0.26 percent

(Adds CEO comments, analyst quote, shares)

By Muchena Zigomo

JOHANNESBURG, March 1 (Reuters) - South Africa's agri-processing business Tongaat Hulett Ltd. (TONJ.J) posted a 44 percent jump in headline earnings on Monday lifted by high world sugar prices, and said it will focus on boosting output.

Raw sugar prices rose to a 29-year high in February and white sugar futures hit a record high in January, driven by a supply-side rally with crop problems in main producers Brazil and India. [ID:nLDE6200RS] [ID:nLDE61H170]

Tongaat has interests in land management and property development, however its main business is sugar production and milling.

Revenue for the full year to December 2009 from its sugar operations in South Africa, Mozambique, Zimbabwe and Swaziland contributed more than 5.3 billion rand to the group's revenue of 9.1 billion rand, the company said.

Peter Staude, Tongaat's CEO, said the company had benefited from a higher global sugar price, after it sold its sugar at an average price of 15 U.S. cents per pound compared with 12.1 cents in the year before.

"For the coming year, we could sell our sugar above 22 cents per pound," Staude told Reuters in an interview.

He said the company expected a "much higher" world sugar price in the coming year owing to lower global output of the sweetener and increased use of sugarcane in ethanol production by top producer Brazil.

Staude said Tongaat would focus its attention on raising sugar output to an installed milling capacity of 1.9 million tonnes per year from 957,000 tonnes in the 2009/10 season.

"There are a number of initiatives we have in place to do that, including improving support for our outgrowers in Zimbabwe and increasing sugar production in Mozambique to 300,000 tonnes a year within the next two years," he said.

The Mafambisse and Xinavane mills in Mozambique produced 134,000 tonnes of sugar in the 2009/2010 season, and Staude said the group was mulling a further expansion on the Xinavane mill.

Tongaat, which changed its financial year-end to March 31 to match sugar seasons in its operations, reported a rise in full-year headline earnings on Monday, in line with its forecast of a 40-45 percent increase.

It said diluted headline earnings per share rose to 795.5 cents in 2009, up from 554.1 cents in the year before.

Revenue grew to 9.1 billion rand ($1.18 billion) from 7.1 billion rand, while profit from operations rose 37 percent to 1.555 billion rand.

"We have been forecasting this," David Shapiro, a fund manager at Sasfin Holdings said.

"I think they are very well positioned to take advantage of a much stronger sugar market."

Tongaat shares were down 0.26 percent at 97.90 rand at 1044 GMT, lagging a 0.98 percent stronger All-Share index .JALSH.

The company said it will publish results for the 15 months to March 31 this year. (Reporting by Muchena Zigomo; Editing by Sharon Lindores) ($1=7.734 Rand)